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What would you pay for this route ? ( I have a chance to buy)


andyinchville

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HI Guys,

 

I was servicing one of my regular locations a few weeks ago when I was approached by an employee asking if I would be interested in buying more vending locations.

 

He told me the route consisted of 24 stops and that here were asking $ XXXX dollars for it (I left the numbers out so as not to bias any input as to what the route is "worth"

 

Anyways, I said I would be interested in learning more and he said he would have his wife call me to talk about it (turns out his wife is the route owner and she was getting out of it after a year because she was getting burned out working 7 days a week (she does 6 days working a bread route and on her day "off" services her snack machine route).

 

I rode with her  3 different times to see the locations and machines and this is what I found or she had told me :

 

1) The route consists of 24 stops...All snack vending.

 

2) The route grossed $7200 for the time period between 4-15-13 to 10-8-13 ( I noted that she usually set her machines for 60 cent chips and nabs, and 85 cents for candy and cookies)

 

3) two stops (Marshalls and TJ maxx) have to pay 16 and 1/2 % commission (to mgt co)

 

4) one school is 10% comm, and one nursing home is 10% comm, bed and bath store 10%, apartment complex 10%

 

5) Some of the machines need coin mech repair or bill validator repairs (I estimated total cost to make repairs at $850 based on VE prices).

 

6) 10 machines are National Vendors 4 or 5 wide with Bill validators (I kick myself but I cannot recall the model #'s...5 are brown / wood grain fronts, rest are black (factory black paint as in newer than the brown machines)....There is one fairly modern GPL machine also.

 

The other 14 machines are like the AP APC-3 machines....I think they were 1 generation before the APC 3 machines (they are coin only and are joined to their respective cabinets). 

 

7) I will have to pull 2 other machines (one small one from a college ( a tiny offsite college teaching area on the 3rd floor of a bank building), and another at a small business - she said no real loss since she said those stops didn't do well anyways.

 

B) The stops she services are all within my servicing area so no real extra driving or out of the way driving needed.

 

9) other stops consist of : 2 pools (seasonal), a small seasonal manufacturing co, 2 auto repair shops, a library,  a hotel employee break room  and a few misc stops.

 

10) the money was mostly bled down each time she serviced BUT she will NOT bleed funds before the sale...I would get all money left in the machines (not to get excited since the changers are almost bone dry (about 1 inch of change left ion each tube....well maybe that is not bone dry buy more like "low" ) after she services the stops regularly), the food will be left in the machines, and I will get about $200 of misc foods that she got from Sams Club.

 

So what do you think I should offer for the route?...She wanted an offer by Wednesday or she said she would start contacting other vendors (only 1 other one in the yellow pages other than me in the local directory but some vendors do come in from neighboring towns (some as far as 50 to 60 miles away!).

 

Thanks in advance for your opinions and ideas.

 

Andrew

 

 

 

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The gross sales are for just under 6 months and the total was $7200 and there are 24 locations. Just some quick easy math tells me that there are not many solid accounts there and looks like the average gross per location is $12 per week. ($7200 / 25 weeks = $288 total for all locations.. and $288/24 locations = $12 per week per location). That is a really low average, and hopefully its the change mech/bill validator problems that are holding some of them back. At that rate, and with low prices, you might not be making any money at all after you add equipment breakdowns, fuel and vehicle costs, stales and your time. I don't think I would pay more than the fair market value of the equipment in place myself, and even then it would  have to be a bargain price.

 

Maybe some of the accounts would take a soda machine to compliment the snacks, and that would help as long as there is some potential in the account starting out. At $12 per week average, I would be very nervous about these accounts.

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The equipment is not great and commissions are too high so 40% gross minus repairs.

$7200 divided by 25 ( weeks) = $288 a week, times 52 = $14976 a year gross, times 40% equals $5990.40 minus $850 repairs leaves an offer of $5140.40

Keep in mind I'm a bulk vendor so this is all theory to me based on conversations with soda/snack vendors.

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Crappy sales, crappy pricing, crappy comissions. The wood aps are probably Ap 5000s. Candy is .55 and sells for .85?

Id offer maybe what the machines r worth, slowly try to increase the prices by offering other products (ive done this with huge success).

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24 snack only accounts averaging $50 a month gross - no wonder she wants out.  Pass on this one unless you need the equipment or are just a glutton for punishment   I won't run a snack machine to augment somebody else's soda machine (let them do their own work if they want to keep that account).

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HI Guys,

 

Thanks for the comments and input.....

 

The Seller and I spoke again and the lowest she will go is $7000 (FWIW I'm leaning towards doing it)

 

I've been thinking about all the different possibilities associated with the buying the route and came up with the following (after doing some more thinking) and looking at your input above :

 

1) Yes, the income is pretty low considering the number of machines out there....on the flip side she did not really spend much time servicing the stops she did (about 4 and 1/2  hours each day I rode with her and a pretty good part of that time was actually spend driving (If I got the route much of the driving would be eliminated since many of her stops were very close to my existing stops).... so the extra time spent servicing the new stops would pretty much be just the added time servicing the machines and not driving to the locations.

 

NOTE: I did learn something pretty interesting also concerning the route that may score me some free drink commissions if I get the route.

 

It turns out that 4 of the stops she has have commissioned drink machines on location...Drink machines that the previous owner (previous to her that is) is still getting commissions on from Pepsi ....

 

The way commissioned drink machines with the local Pepsi Distributor is that the commissions for drink machines go with the snack machine owner IF that is how the machine got onto the site in the first place (example : If I get an new snack location (with no drinks on site currently)  and the site also wants drinks, I can call Pepsi to have them put a commission drink machine on site for me  (they set up the machine, maintain it and fill it) and I as referring vendor would get 10% of all sales from that point on I so long as I had the snack machine on location there).

 

I think what happened on 4 of the stops in this route she is selling me was that the previous owner (previous owner to her that is) sold the location  the current owner (her) and never let Pepsi Know the snack machines were transferred (also, she probably never contacted Pepsi to let them know she was the new owner of the stop) ....consequently he (the previous previous owner) is still getting the Pepsi commission checks when SHE should be getting the checks  (I only found out when I did some investigating and was looking into the possibility placing my own drink machines on some of the sites when I found out that the sites were still getting commissions from the   previous previous owner meaning he is still getting Pepsi Commissions....I also verified this with the management company on the stops which coincidentally also manage 2 sites I have).

 

2) As far as increasing sales per stop, it was interesting she made orders in the truck before even going inside to see what the machines really  needed (almost like per kitting only she drove with all the supplies in the back of the truck....Also, when she did fill the machines she only filled the rows that were empty  6 deep (several stops she did weekly I noticed the same rows were emptied out so probably filling to 10 deep would have helped  make potentially more sales. 

 

Fixing the bill validaters on the big machines would probably help as well (don't ask me why,  but she told me they never bothered to fix them even tho she admitted that it probably would help sales).

 

The last thing I would probably try is putting cake in the machines that she serviced every week or 2 (she has machines she only does every 3 weeks and 4 only monthly although 2 of those will be pulled)...In my machines at least,  cakes sell much better than cookies like Famous Amos, M & M cookies, Grandmas etc.

 

3) While many of her machines are coin only, at least they are the tray type machines that I can use to replace some of my coin only machines which require (gulp) tabbing (Yes I have a few of the old Toms "pig tail" type machines)... (OK in hindsight I would only be able to replace 2 machines since I would only pull the 2 machines she said need pulling).

 

4) I suppose the fact that I negotiated that the coins stay in the machines and the extra food comes with the route effectively  makes the route a little cheaper (I figure, as a minimum, every machine will have at least 1" of coins in each tube so effectively that cuts the price a bit (although probably not enough to offset the total repair costs).

 

Anyways, I think I will go for it.

 

Thanks for the input.

 

Andrew  

 

PS - If anybody has anything else I am not supposed to meet with her until 9 am tomorrow morning and will check back here before going out to meet her. 

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I must be coming at this from a totally different angle. I would not take those machines at that price ever.....

She is making hardly any money of those snacks and the fact that she has no soda machines is horrible. If I could i would never place snack machines and only have soda machines. For what it is worth I think you are making a mistake. You are buying a route that will take a lot of hard work to make barely any profit. She is selling because she made mistakes she could not get out of without some serious work.

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Do NOT BUY at any price really. Those pigtail vendors are crap, and coin only machines too. Its a digital mechanical machine prety much. I mean 24 stops making like $1,200 gross and $500 net a month? Find one good account with no comission and service it once a week

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Andy, I'm with everyone else here. The equipment isn't worth $7000 and you will only be spending money on top of money to repair them or get them up to par. She has basically run a bad route further into the ground and wants someone to bail her out so she can get her money back. No snack should be without a validator on it and every coin mech needs proper inventory. You will spend even more money adding change, properly filling product levels and hopefully adding a bunch of validators. Top this off with no soda machines and this is a loser.

If you have to do all the work to get this thing up to par then you shouldn't have to pay her price. Offer her rock bottom money, say $500 per stop (24 correct?) and tell her even though she doesn't like your offer, you will still pay it when she finds out no other vendor will give her what she wants. Unless she want to correct the deficiencies and put a soda machine into each stop before you buy it. Even then her price is out of line but you can negotiate from there.

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As I like to say "run Forrest run". Like others have said it does not work.

 

FYI, did they tell you those retail accounts are controlled by Best Vendors which is owned by Canteen? Canteen could take control of those accounts at anytime and start servicing them like they have done many times. They did that to my old company I used to manage years back.

 

Move on and find something else.

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If you get this route then whats the point of having some of the most experienced vendors (not me lol) telling you to run away. This is a route for a sucker, but you have VENDISCUSS and if you are asking for our help you should listen. You are going backwards in Vending, knowledge, and profits. Plus imagine all the headaches to fix, your time is better off buying a couple of machines and go knocking on good accounts.

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We can either learn the easy way by taking advice from people who have been there, or the hard way, by asking questions hoping that everyone will agree with your ideas and then ignore valuable advice when given. Everyone has that choice, and I would think that has more than likely been the difference between success and failure in several small businesses.

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I'm just sitting here - banging my head against the wall  :blink:

 

In my consulting work I see this all the time and it does not surprise me really. People call me all the time with this same situation or worst a bizop or all "healthy vending". When I tell them do not do it they seem to ignore my free information. I usually steer them to here and tell them to buy my book, go introduce yourself at Vendiscuss and read, read and read some more then ask some questions to other vendors on the forum before they spend any real money in vending. Seen many ignore that basic friendly advice.

No different than even some of my paying clients that ask questions like putting ice cream machines in a car dealership, glass fronts at apartment complexes etc and they ignore the info only to learn later it was a mistake.

 

As my pappy used to say "you can lead a horse to water you just can’t make him drink. Or "some folks can only learn the hard way".

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As I like to say "run Forrest run". Like others have said it does not work.

 

FYI, did they tell you those retail accounts are controlled by Best Vendors which is owned by Canteen? Canteen could take control of those accounts at anytime and start servicing them like they have done many times. They did that to my old company I used to manage years back.

 

Move on and find something else.

I'm sure that Canteen is content to let somebody else deal with these accounts - did you catch the part about needing an answer by Wednesday or she'd sell it to somebody else?  The lady's got sand

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HI Guys, 

 

First off, I'd like to thank everybody for taking the time to read about my situation and providing your input.

 

I did take everything into consideration as to what was said and ultimately I showed her this thread here on Vendiscuss ( I brought my laptop to the negotiations even tho she said she was "firm" on the price).

 

I believe, based on the input from here, the fact that they wanted "out" from vending , the fact that there is only 1 other local vendor in town (and they are not looking to grow due to medical issues), and the fact that X mas is coming up,  these items "softened" her up a bit when it came right down to doing the deal or not.  

 

Long story short, I did buy the route but I managed to get her down to $6000 for everything.

 

Based on the fact that there were 24 machines on the route, that basically meant I paid $250 per machine on site, and stocked (with whatever money was in the machine at the time (the repair costs I think would basically nullify the $$ in the machine tho) so ultimately I paid $250 per machine, on site and with stock (11 of the machines are Crane National 157's, 1 machine is a newer GPL and 12 of the machines are AP CS-18 machines (coin only BUT I cab use 2 of these to swap out for my older Toms machines so effectively I will be upgrading some of my other machines already on route to boot).

 

I figure I did OK  just in terms of machines alone (the fact that they are already on site with food in them is the "gravy" part)....

 

FWIW - historically, I typically paid about $500 for a used 4 or 5 wide off Craigs List so I figure getting a bunch of machines already on site and not having to run around to buy a machine here and there is a bonus in and by itself.

 

I serviced 5 of the machines today and I truly believe (with proper stocking , fixing bill validators, and even changing out 2 of the small CS machines with a regular 4 or 5 wide machine (I already have those in storage) I can significantly increase the income off those sites. 

 

Tomorrow, I plan on doing as many of the 19 remaining stops as I can (Actually 17 stops because I think 2 still need to be pulled per the previous owner).... I figure I better fill everything, put my card in the machines,  and let the sites know I am the new owner sooner than later).

 

As an aside, I did find paperwork and ad from the original route I bought (the one that got me into vending in the first place).....

 

It consisted of 50 stops for $37,000 (which back figures to $740 per machine....A fair number at the time were older Toms machines but I swapped out a bunch over time although I do still have a fair amount out there)  and was (according to the owner at the time) making a net of $575 per week ( I suppose that back figures to about $13800 per 6 months or $11.50 per machine per week BUT not every machine was worked every week so that figure may be skewed somewhat).

 

Compared to my more recent purchase,  24 Stops for $6000 (back figures to "only" $250 per machine with all "newer machines" netting about $3600 for 6 months (according to her numbers....although I believe they can be increased significantly by putting in bigger machines in some locations, fixing validators etc...Also, I am assuming a 50% mark up but "her" machines were priced somewhat higher than many of mine) means about $6.25 per machine per week (but then again not all machines are worked every week....actually according to her today 8 are weekly (and 3 of them should be bigger machines so they won't essentially run out of product between weekly filligs), 8 are bi weekly, 2 need to be pulled, 6 are every 3 weeks). 

 

Before the "new" purchase today,  we were up servicing about 118 stops grossing about $2500 to $3000 per week (not all stops are weekly....we also have 2 and 3 week stops).

 

I believe my stops are far from optimal in comparison to a lot of reading I do here (optimal in terms of $$ per machine per week per location) but I attribute that to the fact that I am in a smallish town without a lot of huge factories etc.....On the flip side, it is unlikely that the "big boys" (Like Canteen etc...) would try for my stops so the route itself has been very stable....A definite plus I think because I hate moving machines off location.

 

I have been toying with the idea of selling off a few of the slower stops (even before the ink dried on the contract) .....(As an aside I bought a bubble gum / bulk route for $3000....I sold off HALF of the stops for  $3000 and kept the good $$ producing stops.....essentially getting a "free" route.....I think I should be able to do that possibly with this new route or parts of my old route.....

 

One day I'll get a good a really site!  HA  ;-)

 

Thanks again

 

Andrew

 

PS -  With this as my new base (have to make money to live) , I am going to go "hunting" for "good" stops after Thanksgiving....I have a bunch of machines I'd like to get out of storage and I figure I can start selling off some of my "duds" to recoup (heck maybe even make $$) some of my cash outlays thus far.

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Andy, it sounds like $250 per machine is even better than I thought you'd have to pay, so good luck now with it.  If you need any parts for these machines let me know as I stock tons of parts for all machines.  You say there are 12 AP CS snack machines, which I find amazing as I've never known anyone to have more than two or three of them.  Do they all have cabinets from AP bolted to the bottoms of them - all the more better.  Those machines can be validated as well and I can provide the parts if you ever wish to do that.  Good luck with this and please, get some soda machines into those stops so you can make some money!

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How $7000 translates to me. 3 nice AP 113 or AP 112's and 3 D/N 501-E's or Vendo V-Max's

 

This gets you 3 good locations. Less than 3 hours a week to fill 6 machines at 3 locations. $100 a week per location. Is $300 a week or $15,600 a year.

 

156 hours a year servicing equipment. @ 40% profit $6240 or $40 dollars an hr.

 

Or you might say equipment is almost payed for. And if you decided at the end of the year you were burned out. I am sure someone would give you back your $7000 in a heart beat. That would be money in the bank.

 

Buy smart and you will never regret it. Take 1/2 of what the equipment is worth and that is what the route is worth. A AP 113 is worth $1100 to $1500 on location. It is only worth $500 in the garage............

 

Toms, Lance, turn knobs,  are only worth scrape price. Most parts are hard to find and most are worn out.

 

Put the same amount of time you are going to use servicing those 24 stops into finding 3 good stops and you will be a lot happier.

 

Less stress, more profit and more time with the family. 

 

Just my 2 cents  

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I'm sure that Canteen is content to let somebody else deal with these accounts - did you catch the part about needing an answer by Wednesday or she'd sell it to somebody else?  The lady's got sand

 

Might be true for his area but in our area they were not sastified with that and took all them over. While they were small and a pain to deal with we had a ton of them and Canteen took all of them over so it effected our bottom line in the end.

 

I wish him luck with this deal.

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HI Guys, 

 

First off, I'd like to thank everybody for taking the time to read about my situation and providing your input.

 

I did take everything into consideration as to what was said and ultimately I showed her this thread here on Vendiscuss ( I brought my laptop to the negotiations even tho she said she was "firm" on the price).

 

I believe, based on the input from here, the fact that they wanted "out" from vending , the fact that there is only 1 other local vendor in town (and they are not looking to grow due to medical issues), and the fact that X mas is coming up,  these items "softened" her up a bit when it came right down to doing the deal or not.  

 

Long story short, I did buy the route but I managed to get her down to $6000 for everything.

 

Based on the fact that there were 24 machines on the route, that basically meant I paid $250 per machine on site, and stocked (with whatever money was in the machine at the time (the repair costs I think would basically nullify the $$ in the machine tho) so ultimately I paid $250 per machine, on site and with stock (11 of the machines are Crane National 157's, 1 machine is a newer GPL and 12 of the machines are AP CS-18 machines (coin only BUT I cab use 2 of these to swap out for my older Toms machines so effectively I will be upgrading some of my other machines already on route to boot).

 

I figure I did OK  just in terms of machines alone (the fact that they are already on site with food in them is the "gravy" part)....

 

FWIW - historically, I typically paid about $500 for a used 4 or 5 wide off Craigs List so I figure getting a bunch of machines already on site and not having to run around to buy a machine here and there is a bonus in and by itself.

 

I serviced 5 of the machines today and I truly believe (with proper stocking , fixing bill validators, and even changing out 2 of the small CS machines with a regular 4 or 5 wide machine (I already have those in storage) I can significantly increase the income off those sites. 

 

Tomorrow, I plan on doing as many of the 19 remaining stops as I can (Actually 17 stops because I think 2 still need to be pulled per the previous owner).... I figure I better fill everything, put my card in the machines,  and let the sites know I am the new owner sooner than later).

 

As an aside, I did find paperwork and ad from the original route I bought (the one that got me into vending in the first place).....

 

It consisted of 50 stops for $37,000 (which back figures to $740 per machine....A fair number at the time were older Toms machines but I swapped out a bunch over time although I do still have a fair amount out there)  and was (according to the owner at the time) making a net of $575 per week ( I suppose that back figures to about $13800 per 6 months or $11.50 per machine per week BUT not every machine was worked every week so that figure may be skewed somewhat).

 

Compared to my more recent purchase,  24 Stops for $6000 (back figures to "only" $250 per machine with all "newer machines" netting about $3600 for 6 months (according to her numbers....although I believe they can be increased significantly by putting in bigger machines in some locations, fixing validators etc...Also, I am assuming a 50% mark up but "her" machines were priced somewhat higher than many of mine) means about $6.25 per machine per week (but then again not all machines are worked every week....actually according to her today 8 are weekly (and 3 of them should be bigger machines so they won't essentially run out of product between weekly filligs), 8 are bi weekly, 2 need to be pulled, 6 are every 3 weeks). 

 

Before the "new" purchase today,  we were up servicing about 118 stops grossing about $2500 to $3000 per week (not all stops are weekly....we also have 2 and 3 week stops).

 

I believe my stops are far from optimal in comparison to a lot of reading I do here (optimal in terms of $$ per machine per week per location) but I attribute that to the fact that I am in a smallish town without a lot of huge factories etc.....On the flip side, it is unlikely that the "big boys" (Like Canteen etc...) would try for my stops so the route itself has been very stable....A definite plus I think because I hate moving machines off location.

 

I have been toying with the idea of selling off a few of the slower stops (even before the ink dried on the contract) .....(As an aside I bought a bubble gum / bulk route for $3000....I sold off HALF of the stops for  $3000 and kept the good $$ producing stops.....essentially getting a "free" route.....I think I should be able to do that possibly with this new route or parts of my old route.....

 

One day I'll get a good a really site!  HA  ;-)

 

Thanks again

 

Andrew

 

PS -  With this as my new base (have to make money to live) , I am going to go "hunting" for "good" stops after Thanksgiving....I have a bunch of machines I'd like to get out of storage and I figure I can start selling off some of my "duds" to recoup (heck maybe even make $$) some of my cash outlays thus far.

 

If I read this correctly are you saying your average money pull per machine you service is $25.00 gross money?

No offense, but you are working awful hard for very little money in return. Not sure what type of vehicle you are using and total distance traveled to service but gas cost alone is eating you alive.

 

I get people all the time ask me "how many machines do you have" or "how many stops do you have". I tell them it isn’t a matter of how many it is a matter of how much money you are making. I NEVER like the business model that puts to many eggs in one basket but there has to be a balance.

 

Let me put it in the prospective for you. I have a simple drink snack account (two snacks, and three drink) that is serviced once a week and does around $475 a week in gross sales and takes less than an hour to work. That is 15% of your gross average to service 118 stops.

 

Take a hard look at you business model and you will be much happier with the end results.

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Well since you already got it, I recommend this. Keep 3-4 good decent stops. The rest advertise on craigslist. You can.find a big sucker that will pay 6-9K+ for the rest of the accounts. With the extra 3k buy some bulk machines and place those in all of these accounts. Im sure youd go up in 50% income. I was making like $30-$120 a stop on those one day a month. I dont think full line is profitable in your locations atleast not enough. Sure we dont all have locations like mission has (2k a day!) but atleast $400+ a month for a pair a soda and snack

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